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03. 09. 2018

Digital disconnections: Missing links kill banking sales

Disconnection with marketing tools can greatly impact digital banking sales, while disruptions in customer journeys bring about higher abandonment. But how to fill in these digital gaps?

One thing is for sure: an effective marketing strategy is the cornerstone of selling digital banking products – or anything, really. It’s what helps you find prospective customers, and vice versa. Of course, banks are well aware of this. So most of them have been heavily promoting products through social media and online advertising.

But marketing tools are rarely aligned with sales efforts and many prospects are lost because of a flawed digital sales process. Let’s see a typical example. A prospective customer comes across an ad for a new offer, heads to the bank’s mobile website for details, only to find out that they’ll need to go to a branch to make the actual purchase.

Digital sales: time to connect the dots

Sometimes the mobile application process is way too much hassle, or takes far too long. Either way, disappointed prospective customers tend to give up, contributing to the shocking abandonment rate of 70-90% for new product applications.

“While banks have done a terrific job of moving daily interactions into digital channels (such as websites and mobile), their sales efforts have not followed suit. They still rely heavily on branch traffic to sell products. In short, banks are not selling where people are shopping, and this represents a gaping hole in the banking business model,” Gro says.

The solution would be transforming the digital sales process top to bottom. Combining an integrated marketing plan, customized calls to action and relevant offers, banks could have powerful resources at hand for driving sales during the entire lifetime of a customer’s relationship with them.

Is omni-channel already a thing of the past?

Even though the number of product applications with key omni-channel features is still relatively low, banks have already realized the importance of pumping up their omni-channel capabilities, according to a survey by Avoka. It’s a surefire way to better their sales process crossing digital, branch and call centre channels.

You already have that covered? The bad news is that it may not do the trick anymore. There’s a growing number of omni-digital customers, who exclusively use digital channels instead of going to a branch or contacting the call centre.

The digital world has created new behavioural patterns and ways of interaction, changing the values of younger generations. To attract digital-only millennials, for example, banks should also engage customers by the platforms they typically use, such as Google, Apple, Facebook and Amazon.

The expert believes that many banks are still not keen on digitalization and choose to invest in improving old business processes. But outdated working methods and values like “a wide network of branches” are now not only unprofitable for a company, but are actually pulling the business down.

Go digital end to end in customer journeys

Most banks are focusing on front-ends and functionalities for their mobile apps and online portals. But those ahead of the game know that digital must also be extended to the overall client experience, including branches and all processes shared among channels, McKinsey suggests.

It’s never been so easy for customers to compare banking services, especially when it comes to key customer journeys. Banks should identify and prioritize these, and create fully digital experiences. There are about 15 journeys that matter the most to retail customers, including opening an account, applying for a debit or credit card and taking out a mortgage. If done well, banks will finally have a systematic approach to end-to-end digitization so they can redesign a customer journey from scratch in just 3-4 months, McKinsey advises.

One European bank, for instance, used this approach to develop a new customer onboarding process that only requires “12 swipes and a selfie”. The time needed to open an account was cut by 80% and the amount of required information by 65%.

Banks may be caught in digital value traps

To create journeys that deliver a real change in value, banks need a customer-centred digital mindset, integrated data analytics and the progressive introduction of machine learning and robotic execution, BCG reckons. A small subset of about 20-30 customer journeys offers the greatest opportunities for boosting performance.

In general, retail banks that digitalize can achieve a 20% increase in revenues and a 30% decline in expenditures, BCG calculates. But banks failing to address the key challenges associated with digital rollout may find themselves caught in a digital value trap. Meaning that the return on investment does not reflect the cost of transformation.

End-to-end process digitization can help banks move to the next level of collapsing their cost structure across middle and back-office functions, and increasing agility and efficiency. By combining these operations with front-end digital customer experience as well as data analytics, banks can truly become and behave like digital superpowers.